Tuesday, February 28, 2006

Vietnam Gold

The gold price in Vietnam increases from earlier this year. And, there is a new more internationally accepted weight of gold bar being sold in Vietnam now.

"Vietnam’s 1 kg gold bars sell like hotcakes

One-hundred of the first-ever 1 kg gold bars have sold out in six days after a Ho Chi Minh City-based jewelry company debuted them as a unit of measure more common to global bullion trade."

" ... with the remainder bought by individuals to use in payments, ... "
Vietnamese use gold as basic 'ol money! Really! Smart!

More, and pictures at:


Friday, February 24, 2006

Norwegian Euro Oil Bourse Wanted

Norwegian Bourse Director wants oil bourse - priced in euros

by Laila Bakken and Petter Halvorsen


Bourse Director Sven Arild Andersen is fed up with Norwegian oil having to be traded in London and wants to have a commodities and energy bourse in Norway.

The Bourse Director believes that Norway already has the prerequisites for building up a Norwegian or Scandinavian energy bourse.

"This would in such case compete with the bourse in London. Why not have the ambition to outcompete the British petroleum bourse," says Sven Arild Andersen.

"Here, you could trade crude oil, natural gas contracts and establish derivatives for these products."

"In addition, we must set up a larger financial industry around this, as important in other large markets and employ many people. And which are important for the competencies that are needed beyond the extraction itself of oil and gas," says Andersen.

In Euros

Andersen in of the opinion that Norwegian oil must be traded in Euros, which can be advantageous for international customers.

"We have performed market studies and both Russia, which is a large oil exporter, as well as the countries of the Middle East have large parts of their economies in Euros. They would be able to view such a bourse as a contribution to balancing their economies in a better manner than at present, where their products are traded solely in dollars," says Andersen.

The Bourse Director holds out the Scandinavian power bourse, Nordpool, as an example of how a successful bourse is constructed. And he believes that this ought to be included in a Norwegian or Scandinavian energy bourse.

"We currently we have the leading power bourse in Europe. It is large, well-respected and efficient. Nordpool would be natural to consider as being important in the establishment of an oil and energy bourse," says Andersen.

The plans have been discussed for years, but have never gone past the stage of being just talk.

"We must get large Norwegian players onboard such as Statoil and Hydro, and even though the interest has been there, nobody has taken it further with great enthusiasm.

"There is now talk of a fish bourse in Norway and there certainly is no doubt as to whether we thus aren't in a position to build an energy bourse that would be much, much larger and for which we possess significant requisite competence to get up and running."

Friday, February 17, 2006

USD Trend Line

The USD trend line has been heading up in a channel for the last 4 weeks. This appears to be a little rally in a USD decline that started in November, the month that saw a head develope in a head and shoulders topping pattern to the year long rally in a long term bear market of the USD. The USD got back up to the neckline of the H&S pattern and appears to be stalling out now.

What is particularly interesting are the proprietary momentum indicators in Investor's Business Daily which have a particularly good track record. For the USD, they are hard up against the overbought level.

If the USD is really overbought and is going to break its upward trend line, then other related items should be in an over sold position. What might they be and what are IBD's momentum indicators saying about them?

USD - over bought
Gold - over sold
Silver - almost at over sold
Light Sweet Crude - over sold
Swiss Franc - over sold
Euro - over sold

On top of this, many gold and silver producers & explorer shares, and the HUI Index, have gone down in this gold & silver reaction, held at important support levels, and have just broken their power down trend lines to the upside.

It sure looks like the USD trend line is about to change in an important way and provide a stonger tail wind for gold and silver.

A futures chart of the USD

Tuesday, February 14, 2006

Syria Switches to Euro

Syria switches to euro amid confrontation with US
Mon Feb 13, 2006 10:31 AM ET

DAMASCUS(Reuters) - Syria has switched all of the state's foreign currency transactions to euros from dollars amid a political confrontation with the United States, the head of state-owned Commercial Bank of Syrias aid on Monday.

"This is a precaution. We are talking about billions of dollars," Duraid Durgham told Reuters.

The bank, which still dominates the Syrian market although private bank shave been allowed to set up in the last few years, has also stopped dealing with dollars in the international foreign exchange flows of private clients.

The United States has been at the forefront of international pressure on Syria for its alleged role in the assassination of former Lebanese Prime Minister Rafik al-Hariri a year ago. Damascus denies involvement in the killing.

"It looks like a kind of pre-emptive action aimed at making their foreign assets safer, preventing them from getting frozen in case of any conflict," said a Middle East economist who requested anonymity.


Friday, February 10, 2006

American Economic Collapse - Part III

The are a number of things that are big time wrong with the American economy and the financial mass media are going out of there way to keep Americans in the dark.


"Job Disinformation From the New York Times

Paul Craig Roberts
Thursday, Feb. 9, 2006


The latest BLS payroll jobs report says that January 2006 is now the 61st month that the U.S. economy has been unable to create any jobs except ones in domestic non-tradable services, most of which are low-paid.


In his rosy jobs report, Vikas Bajaj does let it out of the bag that "economists estimate that the nation needs to add roughly 150,000 jobs a month just to keep up with population growth." That translates into 1,800,000 new jobs per year to stay even with population. Over the past 61 months 9,150,000 new jobs were necessary in order to prevent population growth from pushing up the unemployment rate.

How many new jobs have been created over the past five years and one month? According to the Bureau of Labor Statistics' latest revisions, a total of 1,054,000 net new private sector jobs were created over the past 61 months (January 2001 through January 2006). Add the total net government jobs created over the period for a total net job creation of 2,093,000 jobs over the past 61 months.

That figure is 7,057,000 jobs short of keeping up with population growth!


Gentle reader, the politicians, the media and the corporations are all lying to you."

One of your best defenses for what is coming economically, a massive increase of the supply of US dollar fiat tokens, is gold and silver metal for starters. Then shares of producers and explorers. This little reaction to the down side in gold and silver in the whole scheme of things is nothing. I would say that it is over now. It is increasing gold and silver prices from this point.

Thursday, February 09, 2006

American Economic Collapse - Part II


Income Growth Negative:
After Adjusting For Taxes, Population, and Inflation


Meanwhile, the most comprehensive data — from the national accounts — shows that the year-on-year trend in after-tax income per capita has now swung into negative terrain for the first time since 1960. The trend is actually weaker now than during any of the past six recessions.


The file shows:
Chart 1: Year/Year Growth In After-Tax Personal Income Per Capita Now Below Zero
Chart 2: Here’s The Chart In Real Terms—Down 2.8% Year/Year


When the **real** economy, not including government spending, slows, a slowdown in Federal tax revenues will result in a massive increase in the US Federal budget deficit, which means increased US federal borrowing, or when the world will not loan anymore to the US, increased rate of USD creation (by the Treasury and Fed) out of thin air by fingers dancing on a key board hooked up to a computer. Digital dollars for free, baby! Or, the further devaluation of existing US dollars.


"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible, to maintain their control over governments, by controlling money and its issuance." -James Madison

"How fortunate for governments that the people they administer don't think" - Adolf Hitler

"Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide." -- John Adams

"We have gold because we cannot trust governments…Paper money is a great aid to politicians: it makes it possible for them to confiscate the savings of the people by manipulation of inflation and deflation". - President Herbert Hoover

America is extending its reach at precisely the moment when its economic power base is weakening -- a classic warning sign of the fall of a Great Power. - Stephen Roach, Morgan Stanley

"Whoever wishes to foresee the future must consult the past; for human events ever resemble those of preceding times. This arises from the fact that they are produced by men who ever have been, and ever shall be, animated by the same passions, and thus they necessarily have the same results." -- Machiavelli

"...the control of credit also has become dangerously centralized ... The great monopoly in this country is the monopoly of big credits. So long as that exists, our old variety and freedom and individual energy of development are out of the question. A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated....This money trust, or, as it should be more properly called, this credit trust, of which Congress has begun an investigation, is no myth; it is no imaginary thing. It is not an ordinary trust like another. It doesn't do business every day. It does business only when there is occasion to do business. You can sometimes do something large when it isn't watching, but when it is watching, you can't do much. And I have seen men squeezed by it; I have seen men who, as they themselves expressed it, were put "out of business by Wall Street, because Wall Street found them inconvenient and didn't want their competition. "
- Woodrow Wilson

"How did you go bankrupt?"
"Two Ways. Gradually, and then suddenly."
- Ernest Hemingway, The Sun Also Rises

Why the S.E.C. or the Commodities and Futures Trading Commission (CFTC) allow this, is the real question. Perhaps this can best be explained in a quote from the Governor of the Bank of England, Edward A.J. George as he identifies the consequences of the sudden, unexpected escalation in the gold price in 1999 (from $265 to $330), after the signing of the Washington Agreement, limiting the European central bank gold sales:

“We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K.”

The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. - Ludwig von Mises, Human Action

* * *

Ask yourself if Bernanke is going to voluntarily stop the credit expansion.
If any of the puppit masters suspected that for a minute, he would never have gotten Alan's job.

* * *

The Dow continues to build a weakening megaphone formation.
The NASDAQ has put in a confirmed head & shoulders pattern with prices breaking down below the neckline.
The S&P has put in a confirmed head & shoulders pattern with prices breaking down below the neckline.
GE - General Electric has hit a new 52 week low the other day.
GM and Ford have mountains of debt that have been given junk status.
"As goes motors so goes the US economic recovery."
Google just had more than $100 dollars knocked off the price of its shares.
The house builder shares are caving in.

Meanwhile in 2005, gold was going up **despite** the USD going up in a bear market rally. This little reaction that gold and silver are in can be over real fast.

It's going to get ugly.

Monday, February 06, 2006

American Economic Collapse 2006

The US Treasury recently went into technical default since its funded debt went above its legal debt ceiling. From the US Treasury's Web site it stated on January 24, 2006 that it had debt of $US 8,185.3 Billion. On February 2, 2006 that it had debt of $US 8,198.6 Billion. Well, its legal debt ceiling is $US 8,184 Billion. The Congress is not acting to legally raise the debt ceiling and the financial mass media sure is not saying anything about it. Odd, but one thing is for sure, if the US Treasury stops borrowing more and more, it will **crash** the huge welfare state that America really is now a days. America is the exact opposite of the "land of the free, home of the brave". And when the rest of the world stops loaning to the US, it will simply vastly speed up the US dollar printing presses.

The latest figures from the US Commerce Department say that US "growth" slowed to 1.1% in the fourth quarter of 2005, down from 4.1% in the previous quarter.

Spending on durable goods is down by 17.5% in the fourth quarter.

The US government's savings rate estimate for last year was negative. That has not happened since the beginning of the last great depression. The savings rate has been negative for the last 8 out of 9 months. What disguises this the huge welfare state that did not exist back at the beginning of the '30s, and the huge US Treasury borrowings.

From Bush's State of the Union Address:

"By 2030, spending for Social Security, Medicare and Medicaid alone will be almost 60 percent of the entire federal budget. And that will present future Congresses with impossible choices: staggering tax increases, immense deficits or deep cuts in every category of spending."

Bush conveniently forgot to say that another option to keep these staggering unfunded liabilities (about $US 51 TRILLION) is for the US Treasury and Federal Reserve Bank to simply create out of thin air the US dollars needed to keep these promises. I don't see why they will not create what ever dollars a needed. It is just that the dollars by then will not be worth anything. It will be a defacto default in terms of purchasing power of the government's promises.

The US dollar as we know it will probably not exist after about the middle of the next decade.

Over the next 25-30 years about 75 million Americans are expecting to retire. What the do not know or choose not to think about is that most will live in destitution and/or not be able to retire. The US government spent all the funds that were supposed to be saved for their retirement and healthcare. The US government is basically broke.

Americans as a whole stopped saving enough (consuming less than they produced) years ago since they fell for their government's promises. Now the US does not have enough wealth (savings) to keep the aging "baby boomers" comfortable in their retirement.

If creating US dollars out of thin air really worked, why should anybody bother working for a living? Give everybody their own printing press.

America used to be a bastion of freedom. Americans knew they were on there own and completely responsible for themselves and their futures. So they worked and saved huge amounts that helped create wealth the likes of which the world had never seen. That era is long long gone. Now America is a bastion of that old Communist tenet: "From each according to his ability, to each according to his need."

Well, as you know, the USSR imploded on itself (not that Americans learned anything from that or gave it any thought). Well, the US is next. What does that say about its US dollar? There are no free markets in the US, nor is there Capitalism in the US. What does that say about its US dollar?

In 1987 Ameirican household debt was $US 2.7 TRILLION, 58% of the economy. Now it is $US 11 TRILLION, 87%. That is not borrowing to create wealth. That is being trapped between a rock and a hard place, like their US government is.

According to a semi-annual AC Nielsen survey: 22% of Americans are living hand to mouth. That puts America near the top of a list of 42 savings short countries, neck and neck with Portugal. Other countries in the top ten are the UK, Canada and France, all heavy duty wealfare states. At the opposite end of the spectrum are Thailand and China, the people of which understand, value and save in gold.

At the World Economic Forum in Davos:

Mr Zhou Xiaochuan, the Governor of the People's Bank of China, said "We need to make a change to stabilise the situation. China has no intention of faster acceleration of foreign exchange reserves." ... "the pace of foreign exchange reserves will be reduced. Our foreign exchange policy is already in a good position.". So much for the US Treasury loading more US debt on China.

Ironically China, with it non-welfare state for the individual, is a high savings rate country and is "in the midst of a burst of "inadvertent individualism"".

Back to America:

The US Treasury and the Federal Reserve Bank have created a huge stock market bubble since the beginning of the '80s, which topped out in 2000. Then they did the same for housing in the US by creating too many dollar and too much available credit at too low of a cost. Well, the American housing bubble is bursting. What is the next bubble that will be created to keep the illusion that everything is economically ok in America? I can not see any other bubble that can be created. The illusion is about to crash along with the economy of America.

Remember, America is borrowing at an annual rate of about 1 TRILLION US dollars per year from the rest of the world to maintain its current lifestyle. That alone, if it were to end, would put about a 10% dent in the US's GDP. It's going to get ugly.